What is a lasting power of attorney and why would someone need one?
A lasting power of attorney (or LPA) is a legal document that lets someone (the donor) appoint one or more people (known as attorneys) to help them make decisions, or to make decisions on their behalf, if they are no longer able to. A lasting power of attorney for property and financial affairs (PFA) can be used when a person has capacity (as long as the relevant box is ticked) or when a person has lost capacity. If a person has capacity, they may wish to have one so that someone can assist them with their finances. For example, a person may not be very mobile, so having a PFA LPA will enable their attorney to pay for things like bills on their behalf and make longer terms plans in the event that they lose capacity and are no longer able to make their own decisions. Anyone 18 or over with mental capacity can have a power of attorney.
What does ‘mental capacity' mean?
The ability to make or communicate specific decisions at the time they need to be made. To have mental capacity, a person must understand the decisions they need to make, why they need to make it and the likely outcome of the decision. Some people will be able to make decisions about some things, while others will not. For example, elderly parents may be able to decide what to buy for dinner but be unable to understand and arrange their home insurance. Alternatively, their ability to make decisions may change from day to day. Needing more time to understand or communicate doesn’t mean you lack mental capacity. For example, having dementia doesn't necessarily mean that someone is unable to make any decisions for themselves. Where someone is having difficulty communicating a decision, an attempt should always be made to overcome those difficulties and help the person decide for themselves. In accordance with the Mental Capacity Act 2005, a person lacks capacity in relation to a matter if they are unable to make a decision for themselves because of an impairment of, or a disturbance in the functioning of, the mind or brain.
What powers does an attorney have?
A property and financial affairs LPA gives the attorney/attorneys the power to make decisions about money and property for a person. For example:
- Managing a bank or building society account
- Paying bills and signing cheques
- Collecting pension benefits
- Selling a property
- Investing money
- Arranging repairs to a property
A health and welfare LPA can only be used once the person lacks capacity; it gives the attorney/attorneys the power to make decisions about things such as:
- The person’s daily routine, for example washing, dressing and eating
- Medical care
- Where the person should live
- What kind of social activities they should take part in
- Life-sustaining treatment
What can’t attorneys do?
Attorneys acting under an LPA have a duty to:
- Follow the Mental Capacity Act 2005’s statutory principles
- Make decisions in the donor’s best interests
- Have regard to the guidance in the Code of Practice
- Only make those decisions the LPA gives them authority to make (each LPA has a preferences and instructions box – in these boxes a person can add restrictions or conditions to areas where they may not wish the attorney to have the power to act)
- Apply certain standards of care and skill (duty of care) when making decisions
- Carry out the donor’s instructions
- Not take advantage of their position and not benefit themselves, but benefit the donor (fiduciary duty)
- Not delegate decisions, unless authorised to do so
- Act in good faith
- Respect confidentiality
- Comply with the directions of the Court of Protection
- Not give up the role without telling the person donor and the Office of the Public Guardian
In respect of a health and welfare LPA, an attorney does not have the right to consent to or refuse treatment in situations where:
- The person has capacity to make a particular healthcare decision
- The person has made an advance decision to refuse the proposed treatment. An attorney cannot consent to treatment if the donor has made a valid and applicable advance decision to refuse a specific treatment. But if the person made an LPA after the advance decision and gave the attorney the right to consent to or refuse the treatment, the attorney can choose not to follow the advance decision
- A decision relates to life-sustaining treatment. An attorney has no power to consent to or refuse life-sustaining treatment unless the LPA document expressly authorises this
- The person is detained under the Mental Health Act. An attorney cannot consent to or refuse treatment for a mental disorder for a patient detained under the Mental Health Act 1983.
A personal welfare attorney has no authority to make decisions about a donor’s property and affairs (such as their finances) unless they are appointed as an attorney under the property and financial affairs LPA. In a property and financial affairs LPA, an attorney can only make gifts of the person’s money or belongings to people who are related to or connected with the donor (including the attorney) on specific occasions (in accordance with Section 12 of the MCA), including
- Births or birthdays
- Weddings or wedding anniversaries
- Civil partnership ceremonies or anniversaries
- Any other occasion when families, friends or associates usually give presents
An attorney has a duty to keep accounts and keep the person’s money and property separate from their own. A property and affairs attorney has no authority in decisions about a donor’s personal care (unless they are appointed as an attorney under the health and welfare LPA).
How many attorneys can they have – does it need to be someone in the family?
They can appoint as many attorneys as they wish, but it is common to appoint between one and four. They must consider the following when choosing their attorney(s):
- They must be over 18 years of age
- They can be a family member (it is common to appoint partners and children), friends or your professional adviser
- They must be trustworthy and possess appropriate skills, so they are confident they will make good decisions on their behalf
- If they are making a property and financial affairs power, they cannot be bankrupt or subject to a debt relief order
- If they want to appoint more than one attorney, they should get on with each other, or are likely to do so
- They can appoint one attorney, but it is advisable to appoint more than one to lessen the chance of misuse of the power and ensure continuity in case one attorney cannot act
- They must agree to be their attorney(s) and understand the role they will be taking on
- They must follow special rules set out in the Mental Capacity Act 2005, make decisions in the donor’s best interests and follow guidance contained in a code of practice
- They will need to sign the lasting power of attorney document accepting their role and their responsibilities
How does one apply for one – what does the process look like?
They can complete an LPA online or on paper. They need to:
- Appoint one or more attorneys
- Decide how they want the attorneys to act (when appointing two or more) both jointly and separately
- Decide if they want to appoint any replacement attorneys (who will act if the original attorneys are unable or unwilling to do so)
- Decide if they want the LPA to be used upon registration, or only when they have lost capacity (only for property and financial affairs)
- Decide if attorneys can consent to life sustaining treatment (only for health and welfare)
- Have the LPA signed by a certificate provider. This is someone who confirms the donor understands it and hasn’t been put under any pressure to sign it. The certificate provider must be someone the donor knows well, or a professional person such as a doctor, social worker or solicitor
Once the LPA has been executed, it is sent to the Office of the Public Guardian with the application fee (or a box can be ticked for the OPG to call you to take payment by card) to be processed. At this point, the OPG must wait for four weeks (the statutory waiting period) before they can register your LPA. This gives people involved in the LPA time to raise any concerns they may have. If there are no objections or problems, the LPA is usually sent back to the person, or a solicitor if one has been instructed, within two weeks of the end of the four weeks above. Once the LPA has been registered and sent to you or your solicitor, the LPA can then be used with consent, or if the person has lost capacity.
How much does it cost?
The current cost to register an LPA is £82 each (so it would be £164 to register both a property and affairs and a health and welfare LPA). If they qualify, they may be able to apply for a remission or exemption of this fee. If you instruct a solicitor to assist with the LPA, there will be costs associated with this. The cost of a solicitor will differ from firm to firm.
How long does one last?
An LPA will last for the duration of that person’s lifetime unless:
- The person revokes the LPA
- The attorneys and any replacement attorneys die or are no longer able to act
- The attorneys and any replacement attorneys disclaim their appointment
- The Court of Protection revokes the LPA
Can you make changes to one or cancel one if it’s no longer needed?
Once an LPA is registered, no changes can be made. Once registered, as long as they have capacity to do so, they can revoke the LPA by way of a deed of revocation.
What happens if the application is rejected?
If an application is rejected, the OPG usually gives a person a set amount of time to execute a new LPA and upon doing so they can pay a reduced application fee. If the time it takes to do a new LPA falls out of this timeframe, the full fee will need to be paid upon submission of a new LPA.
What if the person no longer has capacity to make their own decisions?
If they no longer retain capacity to manage their finances, an application can be made to the Court of Protection for a deputyship order. The court will then make an order for a deputy to manage a person’s property and financial affairs. If a person no longer retains capacity to manage their personal welfare, an application can be made to the Court of Protection for a deputyship order. This is usually decided if there’s doubt whether decisions will be made in someone’s best interests – for example because the family disagree about care, or if someone needs to be appointed to make decisions about a specific issue over time, for example where someone will live.
What’s an enduring power of attorney?
An EPA covers decisions about the donor’s property and financial affairs, and it comes into effect if they lose mental capacity, or if they want someone to act on their behalf. EPAs were replaced by LPAs in October 2007. However, if an EPA was made and signed before 1st October 2007, it should still be valid.
What support can the Office of the Public Guardian provide?
The Office of the Public Guardian has guides on making an LPA, which can be found on its website. It also has a customer service line which can be called to ask questions about an LPA. However, the OPG cannot give legal advice.
Where else can you get advice and information?
Advice and information can be given from the OPG website or from a solicitor. Our law firm Higgs LLP has a well-established and friendly private client department that specialises in LPAs. The most important thing to remember is that attorneys need to be chosen very carefully – they must be trustworthy, follow the donor’s wishes and act in their best interests at all times.
*DISCLAIMER: Anything written by SheerLuxe is not intended to constitute legal advice. The views expressed in this article reflect the opinions of the individuals, not the company. Always consult with an independent legal advisor or expert before making any decisions.